Murder Leads To N.J. Probe Into Bus Deals

It is fitting that Frank L. Black and Alan Mackerley got to know
each other on a school bus.

Both men's fathers were transportation contractors in Sussex County,
N.J., and they met years ago when Mr. Mackerley was a teenager riding a
bus driven by Mr. Black.

But the camaraderie of those early encounters evaporated in the
intervening decades, as the two men assumed control of their families'
bus businesses. In its place arose a rivalry so intense and bitter that
authorities believe it ended in murder.

In a crime worthy of a TV drama, the 53-year-old Mr. Mackerley
stands accused of fatally shooting Mr. Black, 58, in February after
luring him to Florida with bogus promises of a bus deal. Afterward,
prosecutors charge, Mr. Mackerley dumped the body from his speedboat
into the Atlantic Ocean more than a dozen miles from shore.

Although the feud had long been building, authorities believe it
took a lethal turn when Mr. Black snatched away a long-held contract of
Mr. Mackerley's after underbidding him by nearly half.

Not surprisingly, this tale of American capitalism gone awry has
dumbfounded the many northern New Jersey educators and parents who
relied on the two contractors to transport their children to
school.

And less predictably, it has triggered an investigation into school
transportation practices statewide. The probe by the State Commission
of Investigation is focusing on whether New Jersey is suffering not
from open warfare among contractors, but from a suspicious dearth of
competition in districts throughout the state.

"This particular tragedy really blew the lid off this in terms of
publicity and attention," said Lee Seglem, an executive assistant to
the Trenton-based commission. "But even apart from the murder, there
are a lot of legitimate questions that need to be raised and
examined."

Territorial Ambitions

On its face, an investigation into possible collusion among
contractors seems an unlikely outgrowth of a murder that authorities
allege was prompted by an example of competitive bidding by Mr.
Black.

What explains that apparent incongruity is the context in which the
competition occurred.

It's not that battles for routes among New Jersey's roughly 300
private school bus contractors are unheard of. In some cases, school
officials find themselves with multiple companies vying hard to
underbid each other.

But according to many industry observers, such rivalries are more
the exception than the rule. Contractors, they say, often will decline
to bid on routes that are seen as "belonging" to another company. And
they expect the same courtesy in return.

On some occasions, such behavior is said to stem from explicit
back-room deals, and may involve phony bids designed to create the
appearance of competition where none exists. In other instances the
deals are more tacit, reached informally as contractors share drinks or
social outings and agree that nobody wins when they're driving down
prices with cutthroat competition.

So when Frank L. Black Bus Service Inc. took away a contract long
held by Mr. Mackerley's Byram Bus Line Inc. to transport about 150
students from Morris County's small Mine Hill school district,
prosecutors say that Mr. Mackerley saw it as an egregious violation of
the code. And in Mr. Mackerley's eyes, they say, Mr. Black had breached
that code too many times before.

"To say he despised Frank Black is probably an understatement," said
William J. Anderson, a former airline pilot and school bus contractor
who was Mr. Mackerley's best friend for many years. That friendship
ended last summer when Mr. Anderson told authorities that Mr. Mackerley
had confessed the murder to him six months earlier.

Mr. Mackerley's lawyer could not be reached for comment last
week.

For years, the New Jersey School Boards Association has complained
that districts too often go begging for bidders when seeking more than
one proposal for their bus contracts. A survey taken by the association
found that roughly half of the 350 Garden State districts that rely on
outside vendors for their transportation get only single bids, often
from contractors who have had their accounts for many years.

"Obviously, that's not competitive," said Frank Belluscio, a
spokesman for the association. "It's something that warrants
investigation."

Representatives of the state's school bus contractors call such
complaints far-fetched.

"If there are incidences where there is only one bidder, it's a
purely economic decision," said Mary Mazzochi, the executive director
of the New Jersey School Bus Owners Association, a trade group.
Contractors' decisions on whether to bid on a route are influenced by
such factors as distance and availability of equipment and drivers
rather than issues of territory, she said.

"If you have to travel 45 minutes just to get to and from the route,
you have to make a decision whether it's worth it," she said.

Past Convictions Cited

Throughout the 1980s, more than a dozen districts in four New Jersey
counties were implicated in a series of busing-related scandals.
Uncovering evidence of kickbacks, bid-rigging, and other fraud,
prosecutors secured guilty pleas from a handful of local school board
members and transportation coordinators. They also sent several
contractors to prison on charges involving collusion, corruption, and
other crimes.

State Sen. Gordon A. MacInnes, a Democrat, cited those earlier
prosecutions when he called on the State Commission of Investigation to
conduct a broad probe of school bus contracting in the wake of Mr.
Mackerley's arrest by Florida authorities in August. The region Mr.
MacInnes represents includes the Mine Hill district.

"Reports are rampant that companies routinely carve up the turf of
school bus routes to avoid true competitive bidding--at great cost to
taxpayers," Mr. MacInnes wrote the commission in a letter urging it to
undertake the probe. "New Jersey taxpayers are the ones being taken for
a ride by a school bus industry which seemingly enjoys unchallenged
access to public funds."

As the commission pursues its probe, New Jersey school officials
await the outcome of the murder case.

'Admiration Society' Formed

Authorities have laid out a scenario suggesting that Mr. Mackerley's
girlfriend set events in motion last winter by posing in a series of
phone calls as the representative of Chilean businessmen looking to do
business with Mr. Black.

According to court papers filed by the Florida Department of Law
Enforcement, she dangled the prospect of a highly profitable deal to
entice Mr. Black to fly to West Palm Beach.

Once Mr. Black had taken the bait, Mr. Mackerley allegedly shot him
in the head in the front room of Mr. Mackerley's home in Stuart, Fla.,
while holding him in a headlock. Authorities assert that Mr. Black had
been drugged beforehand with a colorless, odorless drug that can render
people semiconscious or knock them out.

Mr. Anderson, the pilot, told investigators that he learned of the
crime after Mr. Mackerley asked him to fly over the ocean to see if Mr.
Black's body, which has not been recovered, had surfaced.

Mr. Anderson entered the bus business in New Jersey as a sideline in
1979 at Mr. Mackerley's urging, then sold the business in 1988. He owns
a home near Mr. Mackerley's in Florida.

Since June, Mr. Mackerley's girlfriend has been held in the Martin
County, Fla., jail on a contempt-of-court charge stemming from her
refusal to talk with investigators. Mr. Mackerley remains in jail
awaiting trial on murder and kidnapping charges. He could face the
death penalty if convicted.

The crime allegedly stemmed from a deep grudge Mr. Mackerley held
against Mr. Black, based in part on a perception that Mr. Black did not
play fair.

Mr. Anderson, who admits he did not like Mr. Black, said Mr.
Mackerley and other school bus contractors were convinced that in
addition to poaching on other companies' territory, Mr. Black cut
corners on his contracts.

On occasion, Mr. Anderson said, he and other allies of Mr. Mackerley
joined forces to tail Mr. Black's buses in hopes of documenting
violations. Mr. Anderson jokingly referred to this loose-knit group as
"the Frank Black Admiration Society."

Busing Seen in New Light

The case has received extensive publicity in New Jersey, rocking the
pupil-transportation industry and hitting home for many school
officials.

"Both of these gentlemen were in my office," Ernest Palestis, the
Mine Hill superintendent, recalled in a recent interview. "When we see
the names in the newspaper, these are real people to us."

Larry S. Feinsod, the superintendent of the 2,000-student Madison
school system in Morris County, shares that personal connection. When
Mr. Feinsod held the top job in Mount Arlington, another district in
the county, Mr. Mackerley was the bus contractor. He provided exemplary
service, Mr. Feinsod said, which made the murder charges even more
shocking.

Based in part on his firsthand impressions of Mr. Mackerley, the
Madison superintendent said he was reserving judgment. But he said
there was one thing he was sure of: The case has changed the way he and
other area school officials think about their bus contracts.

"Prior to this, it all seemed very black and white to me, a matter
of course," Mr. Feinsod said. "I realize now that there may be very
much more to it than that."

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